Mediation is a vital tool in your disputes toolkit. Mediation will help you settle disputes quickly, in private and at a lower cost than going to court. It saves you valuable time so you can get on with running your business.

LawBite Mediator Gregory Hunt outlines the top 7 reasons why you should consider using mediation instead of engaging in open warfare at court.

“mediation isn’t about saying who is right and who is wrong, it is about trying to find a solution to a problem”

Mediation is successful 75% of the time, saving you time and money – let’s face it, for small businesses, time is money, so anything that has a 75% chance of resolving your dispute and removing the need for you to go to court and spend money on litigation has to be good.

Mediation is cheaper and quicker than going to court – a mediation can be set up in a matter of hours and cost a fraction of the price of going to court. Not only is it cheaper in terms of money you have to spend but also in terms of time away from your business. You can mediate by phone, online or in person at a meeting with the other party and the mediator. Either way, time away from running your business is kept to a minimum.

Mediation offers you protection against legal costs when a valid offer to mediate is made – this is a key area when either considering action against another party or being on the receiving end of a claim from another business. If you offer mediation to the other party and they refuse without good reason, then if the matter proceeds to court then your costs could be protected from the moment you offered mediation – whether you win or lose in court. This is one of the reasons we recommend the use of a mediation clause in your standards contracts and terms and conditions. To receive your free clause email us at adr@lawbite.co.uk.

Mediation reduces risks of damage to your reputation – just being in court, whether you end up winning or losing, can have a negative effect on your local reputation, especially if the case is reported in your local paper, but that can’t happen with mediation as nobody even knows there is a dispute at all. This is because nobody outside the mediation agreement knows that there is a dispute and what information is being passed between the parties.

Mediation protects your trade secrets including your valuable intellectual property – if you were in court details of the dispute would all be played out on the public record and your trade secrets would be there for the taking. Competitors could attend the hearing and find out all about your business and use this in their efforts to compete with you or even steal your ideas.

Mediation addresses power imbalances between the parties – this can be really important for a start-up or SME in dispute with an established business about, say, an invention. There are many cases each year where larger businesses are accused of stealing ideas and inventions, and mediation levels the playing field between the parties. It isn’t easy to get a big business to mediate though if they have (or you feel they have) stolen your ideas, so it is important to remember reason 3 above – offer mediation as soon as possible to protect your costs even if you lose at court.

Mediation preserves and even enhances your relationship with the other party – this is one of the biggest secret benefits of mediation. Imagine the scenario that you fall out with a supplier that is vital to your business. Or your biggest client threatens to walk away because of an unresolved dispute over an invoice. You can’t survive without either and if you go to court you go to war, any realistic chance of keeping that client, and keeping your business afloat, disappears immediately. Not with mediation. Everyone thinks about the dispute at hand and how to settle it or fight it, but I am constantly amazed at the power of mediation to take a problem, work with it and come up with something new that the parties are happy with. I have seen parties be aggressive and even violent towards each other and then hours later walk away smiling with a new deal and a new working relationship. This is because mediation isn’t about saying who is right and who is wrong, it is about trying to find a solution to a problem, and often the solution is to continue to work together. This can be the difference between trading or not – if you go to court you go to war, if you mediate you can rebuild a vital relationship and both walk away happy.

So mediation is a really powerful tool for SMEs and startups to get to know. For more information including a free mediation clause to insert into your contracts, email us at adr@lawbite.co.uk or call us on 020 7148 1066.